LONDON- Spain mandated a group of banks on Monday to help it sell its debut green bond, a new 20-year issue, according to a memo from lead managers seen by Reuters.

Barclays, BBVA, Credit Agricole, Deutsche Bank, JP Morgan and Santander have been selected to sell the new bond, which analysts expect will be around five billion euros in size.

The new bond was expected to be launched in the near future subject to market conditions -- language often used by debt issuers a day ahead of syndicated bond sale.

Spain looks set to join a growing club of European states selling or planning to sell green debt to meet increased demand for bonds financing environmentally beneficial expenditures.

Britain for instance appointed a syndicate of investment banks on Friday to sell its first green sovereign bond in the week of Sept. 20. 

Other big issuers such as France, Italy and Germany have all sold green bonds this year. Euro zone benchmark bond issuer Germany in May received a record 39 billion euros of demand on for a 30-year green bond and plans a 10-year green bond on Wednesday.

"It should be clear by now that sovereign borrowers have a strong preference to sell green bonds with long maturities," said Antoine Bouvet, senior rates strategist at ING.

"This is no coincidence."

Green bonds usually offer a slightly lower yield than conventional peers, given the limited supply of such debt and high levels of demand for it. This yield difference is often referred to as a greenium.

Given a median 'greenium' of 3.5 basis points on the French curve and of 4.5 basis points on the Italian curve, Bouvet estimates Spain's green bond could yield roughly 3 basis points less than its non-green equivalent.

Spain's nominal 20-year bond has a yield of around 0.98%.

(Reporting by Dhara Ranasinghe and Yoruk Bahceli; editing by Sujata Rao) ((Dhara.Ranasinghe@thomsonreuters.com; +442075422684;))